The Mexican government has awarded US satellite contractor Boeing a US$1bn contract to deliver a 3-bird end-to-end satellite communications system called MEXSAT.
Although Boeing will build geomobile satellites MEXSAT-1 and MEXSAT-2, the company will…
The Mexican government has awarded US satellite contractor Boeing a US$1bn contract to deliver a 3-bird end-to-end satellite communications system called MEXSAT.
Although Boeing will build geomobile satellites MEXSAT-1 and MEXSAT-2, the company will procure the smaller fixedservices bird MEXSAT-3 from rival contractor Orbital Sciences.
By delegating the construction of the simpler C- and Kuband satellite to Orbital, Boeing appears to be minimising the risks involved in the development of the other two birds, which will each carry a 22m L-band reflector.
“This enables us to offer the best value with the lowest risk within the customer’s schedule,” a Boeing spokesperson told SatelliteFinance.
When asked whether Boeing could apply a similar template for future procurement deals, the spokesperson said that, although there are currently no plans to do so, “if it is the best option to meet the customer’s requirements, it will be considered”.
MEXSAT-3 is scheduled to launch first, at the end of 2012, and the entire system will be used for national security communications, supporting efforts to resolve the ongoing conflict between the Mexican government and the country’s narco cartels. MEXSAT will also help improve civil telecommunications.
Announcing the government’s intention on October 4 to purchase three satellites, President Felipe Calderón said: “Through these actions, the Mexican government is working to ensure that those with least will be able to participate in development through information and communications technologies.” Currently, the majority of satellite communications used by security authorities in Mexico come from Satmex-5, which was manufactured by Boeing for beleaguered Mexican satellite operator Satmex, and launched in 1998.
However, this satellite is expected to end its service life in 2012, and the government plans to sell its 20% stake in Satmex once the state has its own spacecraft and a review of the operator’s capital structure has been completed.
Asked at a press conference whether the new contract would override the services currently provided by Satmex to the government, and whether it would still be necessary to launch Satmex 8, Communications and Transport Minister Juan Francisco Molinar Horcasitas described the initiatives as “totally independent… Of course, this is a system, it is the most important of Mexico’s state or private satellite systems; the development of Satmex must continue along its own path; Satmex 8’s launch schedule is on track”.
Satmex has hired Lazard to review the group’s debt, which includes US$238.2m of first priority senior secured notes that mature next year and US$175m in second priority senior secured notes due 2013, to assist its strategy to obtain financing for the construction of Satmex-5’s replacement.
SatelliteFinance reported on November 12 that Satmex’s second lien creditors are considering backstopping a new equity issue to take out the company’s first lien noteholders and fund the new spacecraft, which will be called Satmex-8.
The operator has already entered into a definitive agreement with Space Systems Loral to manufacture Satmex-8, which will cost approximately US$350m, and ILS to launch the spacecraft in 2012 but the group’s restructuring will require government approval.
Juan Francisco Molinar Horcasitas, the Mexican Communications and Transportation (SCT) Secretary, told the annual Canieti conference in Mexico on October 24 that his government was not planning to undertake any financial rescue of the company.
According to Horcasitas, the state had other legal instruments at hand to prevent Mexico from losing its valuable orbital slots in the event of Satmex’s collapse.
“There is no time period for considering the [restructuring] proposal and although a deadline could be imposed, we are allowing the negotiation processes to go ahead; if this is accepted by the bond holders and creditors and is well executed, the company can be restructured,” he said.
